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Letter: Climate Compatibility of New Oil and Gas Fields

1. Outline

This is a letter to the Rt Hon Kwasi Kwarteng MP in connection with the ongoing consultation on the proposed Climate Compatibility Checkpoint for oil and gas licensing in the North Sea.

2. Key messages

  • The CCC welcomes the proposal to apply a climate checkpoint to North Sea oil and gas production. We encourage the Government to set stringent tests to the licensing of exploration. Equivalent tests should also apply to later development stages, such as consenting of production. These tests will provide a useful complement to UK plans to cut emissions through policies that reduce consumption of fossil fuels, as embodied in the Net Zero Strategy.
  • The best way of reducing the UK’s future exposure to these volatile prices is to cut fossil fuel consumption on the path to Net Zero – improving energy efficiency, shifting to a renewables-based power system and electrifying end uses in transport, industry and heating. Any increases in UK extraction of oil and gas would have, at most, a marginal effect on the prices faced by UK consumers in future.
  • The CCC has not been able to establish the net impact on global emissions of new UK oil and gas extraction. UK extraction has a relatively low carbon footprint (more clearly for gas than for oil) and the UK will continue to be a net importer of fossil fuels for the foreseeable future, implying there may be emissions advantages to UK production replacing imports. However, the extra gas and oil extracted will support a larger global market overall. Whereas the evidence against any new consents for coal exploration or production is overwhelming, the evidence on new UK oil and gas production is therefore not clear-cut.
  • The CCC would support a tighter limit on production, with stringent tests and a presumption against exploration. An end to UK exploration would send a clear signal to investors and consumers that the UK is committed to the 1.5°C global temperature goal. That would also help the UK in its diplomatic efforts to strengthen climate ambition internationally.
  • However, we recognise that there are additional important considerations, such as on energy security, that extend beyond the CCC’s statutory remit.